small business networking
August 7, 2013 10:28 AM Subscribe
Does there exist any online boards, websites, that cater to businesses and/or investors looking to connect? In other words, maybe someone is a owns a small home renovation business and is looking for investors. Or restaurants, plumbers, etc. Basically a place for networking. I have looked on CL and have not seen a category that fits this description, and I am not referring to something like Kickstarter. Any ideas?
Tons. The term you're looking for is "angels".
Pick a local networking group. Angels do not have the same profile as later stage investors. It is a bit of a meat market though - not just because angel investors demand their pound of flesh but because there are tons of parasite/satellite businesses who "serve" the start up market and offer networking services, conferences, meet ups, guides, training etc etc
posted by MuffinMan at 10:37 AM on August 7, 2013
Pick a local networking group. Angels do not have the same profile as later stage investors. It is a bit of a meat market though - not just because angel investors demand their pound of flesh but because there are tons of parasite/satellite businesses who "serve" the start up market and offer networking services, conferences, meet ups, guides, training etc etc
posted by MuffinMan at 10:37 AM on August 7, 2013
I imagine there are such groups on LinkedIn that you could look for. Also there's an active Q&A section on OnStartups (I'm not sure how much networking happens there, but you certainly might find answers to this question there).
posted by Dansaman at 11:09 AM on August 7, 2013
posted by Dansaman at 11:09 AM on August 7, 2013
Most U.S. states have blue sky laws which discourage unregistered private equity offerings, sometimes including provisions that would make it difficult to run an Internet forum devoted to small capital solicitations in specific form. And unless the topics of such a forum were the specifics of particular deals, what would be the point of such forums?
Traditionally, one channel to local private lending is through local accountants and small business lawyers, who often put together worthy borrowers capable of affording higher than bank rate financing, with wealthy individuals looking for higher rates of return on their investments than they can typically get in public channels. Such lenders are not traditional "angels" in that they don't look for equity positions in the businesses to which they lend; but they do look for asset based financing deals, where they can see a significant down payment on the asset from the business owner, and a clear path to re-possession and liquidation of the asset (typically through a UCC filing of a secured interest), or other collateral, if the deal goes south.
Such deals bridge the gap in typical bank financing for new businesses, or for businesses looking to add high cost, but very high return new capital equipment, but which do not have the financial history or results to support traditional bank lending. An example might be a small machine shop looking to add a 5 axis machining center, to go after new business in making contract machine parts for local manufacturing companies. A private lender might structure a 24 month financing package for 80% of the machine center's cost, with a large balloon payment at the end, giving the borrowing machine shop two years use of the money, as time to get the machine into production, to secure the contracts with manufacturers to keep it busy, and eventually, based on higher cash flow the machine center generates, to qualify for regular bank financing to pay off the private loan, with significant interest to the private party. The borrower's 20% down payment (and perhaps an ongoing lien against other collateral of the borrower) provides the "cushion" for the private borrower to come in and do a re-possession and sale of the machining center if the machine shop owners fail to make money on the asset, sufficient to qualify for bank financing by the end of the 24 month contract term. If everything does work out for all concerned, the private lender would probably expect a return of something like 12 to 15% on his money. Not usurious, but steep enough to keep all but the most profitable deals out of consideration.
posted by paulsc at 11:14 AM on August 7, 2013 [1 favorite]
Traditionally, one channel to local private lending is through local accountants and small business lawyers, who often put together worthy borrowers capable of affording higher than bank rate financing, with wealthy individuals looking for higher rates of return on their investments than they can typically get in public channels. Such lenders are not traditional "angels" in that they don't look for equity positions in the businesses to which they lend; but they do look for asset based financing deals, where they can see a significant down payment on the asset from the business owner, and a clear path to re-possession and liquidation of the asset (typically through a UCC filing of a secured interest), or other collateral, if the deal goes south.
Such deals bridge the gap in typical bank financing for new businesses, or for businesses looking to add high cost, but very high return new capital equipment, but which do not have the financial history or results to support traditional bank lending. An example might be a small machine shop looking to add a 5 axis machining center, to go after new business in making contract machine parts for local manufacturing companies. A private lender might structure a 24 month financing package for 80% of the machine center's cost, with a large balloon payment at the end, giving the borrowing machine shop two years use of the money, as time to get the machine into production, to secure the contracts with manufacturers to keep it busy, and eventually, based on higher cash flow the machine center generates, to qualify for regular bank financing to pay off the private loan, with significant interest to the private party. The borrower's 20% down payment (and perhaps an ongoing lien against other collateral of the borrower) provides the "cushion" for the private borrower to come in and do a re-possession and sale of the machining center if the machine shop owners fail to make money on the asset, sufficient to qualify for bank financing by the end of the 24 month contract term. If everything does work out for all concerned, the private lender would probably expect a return of something like 12 to 15% on his money. Not usurious, but steep enough to keep all but the most profitable deals out of consideration.
posted by paulsc at 11:14 AM on August 7, 2013 [1 favorite]
Try your local rotary club, a network for businesses in your area. They offer many options for networking with local business owners.
posted by jander03 at 6:49 AM on August 8, 2013
posted by jander03 at 6:49 AM on August 8, 2013
This thread is closed to new comments.
Except these communities tend to be focused more on technology startups than on local businesses such as home renovation companies.
Perhaps the Small Business Administration has some leads?
posted by dfriedman at 10:36 AM on August 7, 2013